US manufacturing (ISM PMI) has dropped in sytematic, robotic fashion over the last 12 months
From an index reading of 53% in June, 2022 to 47% today, the sector has declined steadily but in the absence of full recognition of the oncoming economic recession, there is no washout. Just steady decline and steady leadership to where we are going. The Good Ship Lollipop will not sail on forever, Hazel.
You can read the full ISM report here.
Of the key elements, new orders are tanking (from February to May: 47 > 44.3 > 45.7 > 42.6), employment is flat (with a positive bias to this point) inventories are declining but customer inventories are building (not a good combo for future employment), prices have been volatile but have declined from 51.3 in February to 44.2 in May and finally, backlogs are very low at 37.5 from 45.1 in February. That is a dangerous trend and also a foreshadow of forward employment weakness.
All in all, US manufacturing is in recession while the Good Ship Lollipop’s vast services sectors sail along as if with not a care in the world. In the coming months, there will be a care in the world.
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